Calculate Mortgage Payment

How to Calculate your Mortgage Payment

In General Finance by J Savvy0 Comments

Ever wonder how to calculate your mortgage payment? Here is the formula:

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Let me just grab a pencil and paper…. Never mind. I’ll pass.

There are easier ways to find how much a monthly mortgage payment will cost.

For example, this nifty calculator:

What I like about this calculator

It’s easy enough to find your monthly mortgage payment by going on real estate sites like Zillow or doing a quick Google search. But I like this calculator for a few reasons:

  1. It’s simple to input and change scenarios
  2. It shows more than just your monthly payment by including the total interest you’ll pay and the gross total (principal + interest) you’ll pay over the lifetime of the loan
  3. It shows the amortization rate. Which is a fancy way to describe the fixed payment schedule of your loan. This schedule also breaks down the interest vs. principal amount in each payment (hint: the interest payments are front-loaded)

“Calculate mortgage payment”

It's Too Much

Trying to run that mortgage formula on your own

If you’re like me, you have Googled a mortgage payment about 100 times while browsing houses for sale. Even if you aren’t in the market for a house, looking at them is still fun. And it’s fun to see what you could afford. Not that you should buy up to the max the bank approves you for… but that’s a story for another time.

I’ve put this calculator here to simplify the process. Want to see how much that house will cost you over 30 years? Come here. Want to see what the interest is on a $300,000 mortgage? Come here. (It’s $215,610.00 at a 4% interest rate over 30 years, if you’re curious).

Bookmark this page and come here when you want to run a mortgage payment calculation. 

Save your brain power and let the calculator do it for you.

For the mathematically inclined…

M = P [ i(1 + i)^n ] / [ (1 + i)^n – 1]

Where…

M = Monthly mortgage payment

P = Total loan amount

i = Monthly interest rate (ex: 4% annual rate = 0.33% monthly rate (4%/12))

n = # of payments (ex: 30 years = 360 payments (12 months *30 years))

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